Federal regulators have renewed charges that the mobile Internet service LightSquared interferes with military and aviation operations, in what experts say is a severe blow to the fledgling business.
The fresh test results, released late last week, had been a last-ditch chance for Reston-based LightSquared to prove that its satellite service was safe. But the results confirmed findings that the network would interfere with key Global Positioning System technology used to steer planes and operate sensitive construction and military equipment.
On Wednesday, the company is slated to announce its business plans in the wake of the report.
Some government officials said the problems didn’t seem fixable.
“There appear to be no practical solutions or mitigations that would permit the LightSquared broadband service, as proposed, to operate in the next few months or years without significantly interfering with GPS,” wrote Ashton Carter, deputy secretary of defense, and John Porcari, deputy secretary of transportation, in a letter. The officials head the interagency National Space-Based Positioning, Navigation and Timing group.
Their conclusion, after several months of testing, will put off the company’s attempts to gain license approval by the Federal Communications Commission to light up its satellite network and begin selling broadband Internet service that would compete with AT&T, Verizon and T-Mobile.
“There’s no way the FCC will grant that approval after this report,” said Christopher King, an analyst at Stifel Nicolaus. “The question will be, when will they run out of money?”
Indeed, an urgency to resolve interference problems brought Philip Falcone, founder of LightSquared, to Washington on Jan. 4 to meet with FCC staff. At the meeting, the hedge fund billionaire and founder of Harbinger Capital highlighted the company’s extensive investment — of $3 billion — in the venture that supports the agency’s goals of extending broadband Internet to more U.S. homes, according to public filings.
The FCC is under investigation by some Republican lawmakers, who question the agency’s decision in early 2011 to grant LightSquared an initial waiver to fast-track its business.
Amid its regulatory headaches, LightSquared has responded with its own offense against federal officials. It has protested the government’s process in testing its network, saying the interagency group’s vice chairman, Brad Parkinson, has a conflict of interest because he serves on the board of GPS maker Trimble, which has lobbied against LightSquared.
“Government testing has become unfair and shrouded from the public eye,” LightSquared said in a news release. “Under an agreement worked out directly between representatives of Trimble — the same company that has paid for a year-long lobbying campaign against LightSquared’s network — LightSquared was specifically excluded from the testing process.”
The interagency group and Trimble both failed to respond to requests for comment.